Category: Strategy

A former senior managing director of Toyota Motor Corporation and renowned leader of their famous manufacturing system, Masao Nemoto is known throughout the world as a leader in quality control and process optimization. In a sense, he is one of the principal architects of the “Toyota Way.”
What we learn from Nemoto is far more than quality management. His ideas on leadership have been documented, and reveal the profound knowledge Nemoto infused into the day-to-day operations at Toyota.
One particular aspect of Nemoto’s thinking has been largely ignored by western companies to their own detriment: coordination between business units.
Nemoto insisted on a culture of shared responsibility. Here’s what Nemoto says:
“One of the most important functions of a division manager is to improve coordination between his own division and other divisions. If you cannot handle this task, please go to work for an American company.” (see his 10 leadership principles below)
Nemoto believed that critical tasks could not be left to a single business unit, but rather should be a collective responsibility.
What has this got to do with leadership?
Nemoto’s point of view says that leaders must lead across the company, not just their own fiefdom. It is ironic, to say the least, that the democratization of business happened first not in the West, but in Japan, at companies like Toyota. Or in Brazil, with Semco.
Note: OK, there are a few American companies in this camp as well: Zappos and W. L. Gore & Associates…
Nemoto’s thinking went all the down to the individual worker on the assembly line. Everyone speaks, insists Nemoto, not just management. A direct result of this view is the work principle: problems must be solved at the lowest possible level. All employees take responsibility for problem solving, instead of pushing the issue upwards. Every worker in a process can be stop the work flow, without waiting for a supervisor to make the decision. It is this transparency which drives out defects and makes quality job one. Now wasn’t that a slogan we heard somewhere before?
Next time you bring your business unit heads around the conference table, ask yourself: “Are we competing against each other or against the competition?”
For reference, here are Nemoto’s 10 leadership principles:
1. Improvement after improvement. Managers should look continually for ways to improve the work of their employees. Advance is a gradual, incremental process. They should create all atmosphere conducive to improvements by others.
2. Coordinate between divisions. Managers of individual divisions, departments, or subsidiaries must share responsibility. Nemoto offers this advice to his managers:
One of the most important functions of a division manager is to improve coordination between his own division and other divisions. If you cannot handle this task, please go to work for an American company. A corollary of this is that upper management should not assign important
tasks to only one division.
3. Everyone speaks. This rule guides supervisors of quality circles at Toyota, ensuring participation and learning by all members. It has also been generalized to all meetings and the annual planning process. By hearing everyone’s view, upper management can create realistic plans that have the support of those who must implement them–an essential element in quality programs.
4. Do not scold. An alien concept to most managers. At Toyota the policy is for superiors to avoid giving criticism and threatening punitive measures when mistakes are made. This is the only way to ensure that mistakes will be reported immediately and fully so that the root causes (in policies and processes) can be identified and amended. Assigning blame to the reporter clearly discourages reporting of mistakes and makes it harder to find the underlying cause of a mistake, but it is difficult to train managers to take this approach.
5. Make sure others understand your work. An emphasis on teaching and presentation skills is important because of the need for collaboration. At Toyota, managers are expected to develop their presentation skills and to teach associates about their work so that collaborations will be fuller and more effective.
6. Send the best employees out for rotation. Toyota has a rotation policy to
train employees. There is a strong tendency for managers to keep their best employees from rotation. But the company benefits most in the long run by training its best employees.
7. A command without a deadline is not a command. This rule is used to
ensure that managers always give a deadline or schedule for work. Employees are instructed to ignore requests that are not accompanied by a deadline. The rationale is that without a deadline, tasks are far less likely to be completed.
8. Rehearsal is an ideal occasion for training. Managers and supervisors give numerous presentations and reports. In a QC program there are frequent progress reports. Mr. Nemoto encourages managers to focus on the rehearsal of reports and presentations, and to require that they be rehearsed. Rehearsal time is used to teach presentation skills and to explore problems or lack of understanding of the topic. Because it is informal, rehearsal time is better for learning.
9. Inspection is a failure unless top management takes action. The idea
behind this is that management must prescribe specific remedies whenever a problem is observed or reported. Delegating this task (i.e., by saving “shape up” or “do your best to solve this problem”) is ineffective. So is failing to take any action once a problem is defined.
10. Ask subordinates, “What can I do for you?” At Toyota this is called “creating an opportunity to be heard at the top.” In the first year of a quality-control program, managers hold meetings in which employees brief them about progress.
Three rules guide these informal meetings:
1. Do not postpone the meetings or subordinates will think their project is not taken seriously.
2. Listen to the process, not just the results, since QCs focus in on the process.
3. Ask the presenters whether you can do anything for them. If they ask for help, be sure to act on the request.
This philosophy can be generalized. If top management is perceived as willing to help with problems, employees are more optimistic about tackling the problems and will take management’s goals more seriously.
While reading these principles of Nemoto, I couldn’t help but be reminded of good old Deming.